Venezuela Announces 760,000 Tonnes Of Imported Food Is On The Way

[Judi Lynn]

Venezuela Announces 760,000 Tonnes Of Imported Food Is On The Way

CARACAS, June 18 (BERNAMA-NNN-MERCOPRESS) -- Venezuela is awaiting the arrival of 760,000 tons of food from different associated countries which are destined to build a national reserve of food, according to Food Minister Felix Osorio.

The announcement follows strong suggestions that rationing of certain food and toiletry items was in the pipeline.

"We are working in coordination with allied countries. The food reserve is arriving, we're talking of 760,000 tons of different food items" added Osorio who did not give details of the shipments arrival date, during a tour of several cities that are suffering serious shortages.

Venezuelans have become accustomed in recent years to periodical shortages of different staples and other items such as coffee, sugar, cooking oil, butter, milk, flour and most recently toilet paper, but the situation instead of improving has worsened.

"This administration has taken all the necessary measures. We are not going to restrict the sale of food items. We're going to challenge face-on those rumours (on rationing); we're addressing a temporary situation in the midst of an economic war", said the minister in an interview with national radio and television.

More:
http://www.bernama.com/bernama/v7/wn/newsworld.php?id=956783

[ocpagu]

1. Good news.

A reserve of food will give the Venezuelan government some time to make the adjustments needed to ensure stabilization in food distribution without threatening the country's own stability or leaving the burden to the most humble.

[COLGATE4]

2. Begs the question of why Venezuela, a major oil-exporting

country now has to import basic foodstuffs avoid shortages in basic items.

[Socialistlemur]

3. There's a simple answer: price and foreign currency exchange controls

Venezuela's economy was designed under Chavez to slowly destroy private enterprise and thus national productivity. The system is fairly simple and can be charted easily. The chavista regime felt it could plug the holes it was creating with imports, but they ran into problems: 1. Logistics and 2. Lack of hard currency.

The logistics comes in because the regime tries to use a state controlled economy, bureaucrats are named for party allegiance and connections, and thus their lack of capability and tendency to be corrupt really jams the system. Thus there have been numerous instances of food rotting in containers, and also the wrong items being purchased.

The lack of hard currency comes in because the government has nationalized industries such as iron mines, aluminum shelters and steel plants. They barely produce. And PDVSA has been gutted, both from a cash and personnel standpoint. Thus today PDVSA produces a lot less than in 1999 when Chavez took over. The oil price is about 5x what it used to be back then, but Chavez funneled a lot of cash to Cuba, and smaller amounts to Nicaragua, Argentina, and other political allies. And there was a lot of weapons purchases and a significant amount is stolen. So they lack the cash flow to plug the holes. And this means they are making deals to borrow from multinational oil companies. I know for sure because I just received an email from a friend in a major oil company offering me a job. He says they are gearing to work in Venezuela because PDVSA is letting them back in, I know Venezuela's economy and the gaps, so they want me aboard to help them steer through the shoals and negotiate hard to make sure their profits are protected. It's more of the same, and things never change.

[COLGATE4]

4. Ding! Ding! Ding! We have a winner! nt

[naaman fletcher]

5. To be fair,

Venezuela as spent a lot of money on social programs. That is the essential point that the Chavistas make and it is correct.

The problem is that they spent more than they could afford, which is killing the golden goose (PDVSA) through lack of investment. The end result is that PDVSA is having to bring the foreign companies back in.

Who would have thought that the Chavez years would have resulted in putting the foreign companies back on top of the food chain? Yet that is what is happening right now.

[Socialistlemur]

6. Social spending has nothing to do with it.

If they keep the bolivar fuerte expensive then the petrodollars buy less bolivars. Thus the government has less money. The money should be spent onyx y and z. I won't be prescriptive, but a strong currecy does cause less growth.

Then there's the lack of,competitiveness. It destroys local producers. And those capitalists do have employees which find themselves on the street.

The Chavez regime has had a lousy economic strategy, and they have caused as much destruction as ancient locusts. This in spite of a five fold increase in oil price Maduro is running around begging for loans. Loans he may get at 10 to 14 % interest. And the longer he waits to devalue, the worst it gets. The guy is really pathetic.